SA targets growth

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South Africa is entering a new phase in its economic recovery, with improvements in energy supply, logistics and infrastructure beginning to address some of the structural constraints that have held back growth.

For much of the past decade, economic growth was constrained by persistent problems in energy, transport and infrastructure. These increased the cost of doing business, weakened competitiveness and affected investor confidence.

The government responded with a series of reforms aimed at addressing those constraints.

One of the clearest signs of change has been in the energy sector. South Africa is approaching 500 consecutive days without load shedding, following five interventions announced by President Cyril Ramaphosa in 2022.

The reforms have coincided with an improvement in Eskom's energy availability factor, which has reached its highest level since 2020.

More than 6,100MW has been restored to the electricity grid, while unplanned outages have fallen sharply and diesel spending has declined by more than 80%.

More reliable electricity gives businesses greater certainty to invest and expand production, although the wider economy continues to face significant constraints.

Infrastructure investment is also gathering pace. A portfolio of 263 projects worth almost R2tn is progressing through various stages of development, while 37 projects worth R69bn have been completed over the past 18 months.

The government and business now face the challenge of turning these projects and reforms into stronger economic growth.

This is the focus of the third phase of the Government Business Partnership, launched last month. It follows developments including South Africa's removal from the Financial Action Task Force's grey list and recent sovereign credit-rating upgrades.

The partnership aims to increase investment, accelerate economic activity and support the creation of more than one million jobs by 2030.

Its priorities include energy, logistics, mining, tourism, agriculture and infrastructure, alongside measures aimed at tackling crime and corruption, improving competitiveness and increasing opportunities for young people.

The partnership has set several targets, including operationalising the South African Wholesale Electricity Market by early 2027, unlocking a 32GW pipeline of grid connections, increasing freight volumes to 180 million tonnes and mobilising an estimated R500bn in transport and logistics investment.

It also aims to unlock more than R50bn in mining capital expenditure and increase international tourist arrivals to 3.8 million by the end of 2027.

The partnership is based on greater co-operation between government and business. Government is responsible for creating an enabling environment through policy, infrastructure and public services, while businesses provide capital, expertise and investment.

But recent economic data shows that the recovery remains uneven.

After six consecutive quarters of growth, South Africa's economy contracted by 0.2% in the second quarter of 2026. Weakness in mining, manufacturing and trade, along with subdued investment and rising imports, continued to weigh on economic activity.

The contraction highlights the gap between progress on some structural constraints and the economy's overall growth performance.

The improvements in energy, logistics and infrastructure could help reduce some of the constraints on businesses, but the key test will be whether they translate into higher investment, stronger productivity, job creation and improved living standards.

South Africa has made progress in addressing some of the structural problems that have weighed on its economy. The next challenge is to turn those reforms into sustained economic growth.

Continued co-operation between government and business, together with effective implementation and accountability, will be important if the country is to achieve more inclusive growth.

David Jacobs is chief director: cluster communication at the Government Communication and Information System (GCIS).